London, UK, Thursday July 09 2009: Companies can save large amounts of money by streamlining the less obvious areas of their spending, according to procurement consultants Efficio.
In the latest Viewpoint article, Efficio Vice President Luisella Chiesa says most organisations have brought their main areas of spend with key suppliers under control.
Less obvious areas, however, typically representing only about 10 per cent of spend, are often ignored even though they often account for 80 per cent of suppliers and the vast majority of transactions.
Tackling these areas – the “tail spend” – can produce double-digit savings and creates greater spend transparency and compliance, Chiesa says.
This then enables benefits that have been captured on the entire spend base to hit the bottom line and give companies an advantage over their competitors. It can even mean the difference between success and failure for a business.
In the Viewpoint article, titled Tail Spend, the Forgotten Opportunity, Chiesa says uncontrolled spending in these areas usually results when employees fail to comply with agreed contracts with suppliers and when they make emergency purchases of goods and services.
She says tail spend management can be improved by examining the supplier base, streamlining processes and technology and improving unfavourable payment terms.
Chiesa concludes: “Companies which are successful at managing their tail spend will put themselves at an advantage over their competitors.
“There are few companies which can afford not to address such a critical area at this time and capturing a further significant percentage could make the difference between those who make it and those who don’t.”
Notes to editors:
Tail Spend, the Forgotten Opportunity can be downloaded from the Efficio website at www.efficioconsulting.com
Efficio is a results-focused procurement consultancy, with a track record of helping leading organisations achieve more value from their procurement. Comprised of experienced professionals with a blue-chip consultancy heritage, Efficio combines the credentials of a top tier firm, with the depth of expertise of a flexible niche player. Clients include 3i, AstraZeneca, Barclays, BAT, Biffa, Deutsche Post, Ford, Goldman Sachs, HBOS, KKR, Nokia, National Grid, O2, Philips and Thames Water.
For more information please contact:
Georgina Golding, Marketing Co-ordinator, Efficio, on:
+44 (0)20 7553 6938 or +44 (0)7515 199 425 or on
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